Annual Financial Report
FIDELITY JAPANESE VALUES PLC
ANNUAL FINANCIAL REPORT, PROXY FORM ANDADDITIONAL DISCLOSURES
TO THE PRELIMINARY RESULTS FOR THE YEAR TO 31 DECEMBER 2009
Further to the voluntary disclosure of the Company's annual results for the
year ended 31 December 2009 by way of a preliminary announcement dated 15 March
2010, in accordance with the Disclosure and Transparency Rules ("the Rules")
4.1.3 and 6.3.5(2) this announcement contains the text of the preliminary
announcement dated 15 March 2010 together with the additional text in
compliance with the Rules.
The Company's annual report and financial statements for the year ended 31
December 2009 together with the accompanying proxy form have been filed with
the UK Listing Authority Document Disclosure team and will shortly be available
for inspection at the UK Listing Authority's Document Viewing Facility which is
situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS
Tel: 020 7676 1000
(Documents will usually be available for inspection within six normal business
hours of this notice being given).
The annual report and financial statements will shortly be available on the
Company's website at www.fidelity.co.uk/its
Rebecca Burtonwood, FIL Investments International, Company Secretary - 01737
836 869
31 March 2010
FIDELITY JAPANESE VALUES PLC
Preliminary Announcement of Results
For the year ended 31 December 2009
Chairman's Statement
For the year ended 31 December 2009
The Year's Results: NAV (undiluted) 55.56p (+1.98p; +3.7%)
The ordinary share price: price: 48.50p (+6.75p; +16.2%)
The subscription share price: 8.28p
Discount: 12.7% (22.1% in 2008)
PERFORMANCE REVIEW
Over the year to 31 December 2009, the undiluted net asset value of your
Company's shares rose by 1.98p per share (3.7%). The increase in value was
primarily due to a rebound in the Japanese stockmarket and the Manager's stock
selection. The attribution analysis in the annual report shows that the rise in
the stockmarket accounted for 4.34p of the increase in the net asset value per
share and that the stock selection by our Manager added another 3.70p. Gearing
accounted for an additional 2.31p. On the other hand, the increase in value was
largely offset by currency losses (-7.84p per share) as a result of a weaker
yen against sterling at the year end. The yen in practice had been stronger
during the year but weakened at the time of the year end valuations resulting
in these currency losses.
The increase in net asset value of 3.7% during 2009 represented an
outperformance of 10.0% relative to our Benchmark, the Russell Nomura Mid/Small
Cap Index (when expressed in sterling). Given signs of a more benign global
macroeconomic backdrop and greater stability in financial systems, cyclical
manufacturers performed better than other segments of the market. In the LCD
and semiconductor industries signs of a cyclical bottom supported the share
prices of electronic parts and materials producers. At the same time inventory
restocking and healthier than expected final demand buoyed investor confidence
in automobiles and parts makers. Although the generally strong yen posed
downside risks to exporters' earnings, their aggressive cost-cutting efforts
have created a leaner, more competitive corporate landscape that will translate
into higher operational leverage as revenues improve.
Performance was further enhanced by the effect of gearing. The Board made a
decision in November 2009 to use derivatives for gearing purposes. We expect
the use of Contracts For Difference ("CFDs") will provide the desired level of
gearing at a lower cost.
MARKET REVIEW
Against a backdrop of worldwide monetary easing and aggressive fiscal stimulus,
global equity markets maintained a steady upward trajectory and Japanese stocks
hit a high in August. Thereafter, however, Japanese stocks started to lose
momentum and have since lagged their global peers. A landslide victory in Lower
House elections by the Democratic Party of Japan ("DPJ"), which brought an end
to more than half a century of dominance by the Liberal Democratic Party (LDP),
failed to buoy investor sentiment as the DPJ quickly lost much of its political
momentum after taking power in September.
The weak performance of financials, which faced heavy selling pressure due to
concerns about regulatory and capital adequacy risks, and generally renewed
strength in the yen precipitated market declines in the autumn. It was only in
late November that the yen started to weaken against the dollar, triggering a
sharp rebound in Japanese exporters' share prices. However, this was
insufficient to offset previous declines during the year.
Over the period, smaller companies held up relatively well, outperforming large
caps. At the same time, a number of technology-related companies saw their
share prices respond positively to earnings upgrades. The best performing
sector within the small cap universe was transport equipment (including auto
parts makers), followed by non-ferrous metals and electrical machinery.
GEARING
Following the repayment of the loans with The Royal Bank of Scotland PLC in
August 2009 and November 2009 respectively, the Company has no loans. However,
the Company has obtained equivalent exposure to the market through the use of
Contracts For Difference ("CFDs"). Total assets employed as at 31 December
2008 amounted to £75.17m and, as at 31 December 2009, the total portfolio
exposure was £71.36m comprising assets of £53.10m and exposure through CFDs of
£18.26m. This change to the Company's Investment Policy was authorised by
shareholders at a General Meeting held on 10 November 2009. At 31 December
2009 the long positions of the CFDs amounted to approximately 31.4% of the net
asset value (see the annual report for further details).
The Company is using CFDs in the same way that it used the traditional bank
loans - to increase the exposure to stocks. Due to the accounting treatment of
CFDs, the exposure to shares held through CFDs is not treated on the Company's
Balance Sheet in the same way as its normal equity investments. Only the
unrealised gains and losses of the CFDs are shown.
Realised and unrealised gains and losses are reported via the capital column of
the Income Statement, with income and expenses relating to CFDs being reported
via the income column. Proceeds of CFDs are shown as a separate cash flow
item.
Additional disclosures to the financial statements have been included
explaining the Company's geared position through the use of CFDs, including
details on how they are measured and how they are reported. Additional
information is also given detailing the underlying exposure to the CFD
holdings, and the full portfolio listing in the annual report includes
underlying exposure reporting. Further details on the use CFDs may be found in
the Directors' Report.
SUBSCRIPTION SHARES
At the General Meeting in November, a Bonus Issue of one subscription share for
every five ordinary shares held by qualifying shareholders was authorised,
together with the adoption of new Articles of Association for the Company. Each
subscription share gives the holder the right, but not the obligation, to
subscribe for one ordinary share at the end of each month from the end of
February 2010 until the end of February 2013 inclusive. Each subscription share
may only be exercised once. The exercise price is 55 pence per share based on
the Company's NAV at 5.00pm on 10 November 2009, plus a 1% premium to such NAV,
rounded up to the nearest whole penny. A total of 19,115,381 subscription
shares were allotted on 11 November 2009. The subscription shares were listed
and dealings commenced on these shares on 12 November 2009. The rights
attaching to a total of 59,156 subscription shares were exercised at the end of
February 2010, resulting in an allotment of 59,156 ordinary shares of 25p
each. Further details on the subscription shares may be found in the
Directors' Report.
THE BOARD
Your Board continues to monitor corporate governance issues, reviewing and
updating processes as appropriate. In accordance with the Listing Rules, Simon
Fraser, following an evaluation of his performance by his fellow Directors and
on their recommendation, will seek
re-election at the forthcoming Annual General Meeting. Simon Fraser retired
from his executive responsibilities at Fidelity in 2008, however he has agreed
to continue his directorship of the Company. Simon Fraser retires and seeks
re-election on an annual basis due to his recent employment relationship with
the Manager and his directorship of another investment trust managed by
Fidelity, namely Fidelity European Values PLC. Having been on the Board for
more than nine years and because he has not retired at the last two AGMs,
Nicholas Barber is subject to retirement by rotation and seeks re-election at
the forthcoming Annual General Meeting. He has proved to be a most diligent
member of the Board and has discharged his duties as Senior Independent
Director conscientiously.
Having been on the Board for more than nine years I will also retire and,
following an evaluation of my performance by my fellow Directors and on their
recommendation, I will seek re-election at the forthcoming Annual General
Meeting.
SHARE REPURCHASES
Purchases of ordinary and subscription shares for cancellation are made at the
discretion of your Board and within guidelines set from time to time by the
Board in the light of prevailing market conditions. Share repurchases will only
be made when they will result in an enhancement to the net asset value of
ordinary shares for the remaining shareholders. In recent years share
repurchases have been used sparingly due to their impact on liquidity and
gearing. Your Board continues to believe that the ability to repurchase shares
is a valuable tool and therefore a resolution to renew your Company's authority
to repurchase shares will be proposed at the forthcoming Annual General
Meeting.
ANNUAL GENERAL MEETING - 13 MAY 2010
The Annual General Meeting will be held at midday on 13 May 2010 at Fidelity's
offices at 25 Cannon Street in the City of London and all investors are
encouraged to attend. It is the one occasion in the year when shareholders can
meet all of the Directors as well as representatives from the Manager.
Following the meeting the Portfolio Manager will give a presentation on the
past year and the prospects for the current year.
CONTINUATION VOTE
The Articles of Association of the Company require a continuation vote every
three years. An ordinary resolution that the Company continue as an investment
trust for a further three years was passed at the 2007 Annual General Meeting.
A further continuation vote will take place at this year's Annual General
Meeting.
During the past year your company significantly outperformed the Russell Nomura
Mid/Small Cap Index (in sterling terms) and there are encouraging signs for
Japanese companies, particularly those focussed on high growth service sectors
and those with exposure to China and elsewhere in Asia. Therefore your Board
recommends that shareholders vote in favour of the continuation vote. A further
continuation vote will take place at the Annual General Meeting in 2013.
OUTLOOK
In the near term, sovereign credit concerns in Europe and other macro
uncertainties such as a tightening of monetary policy in China could
potentially fuel yen appreciation and diminish investors' confidence in
Japanese companies' earnings recovery. However, your Board believes that there
is the potential for Japanese stocks to catch up with their global peers in
2010.
Japan's production recovery is gathering pace due to the completion of
inventory adjustments for electronic components and devices, supported by firm
demand in overseas markets, particularly in Asia and other emerging markets.
This resulted in stronger than expected GDP growth of +4.6% annualised in the
fourth quarter of 2009. While this pace of growth is unlikely to be
sustainable, the implementation of additional stimulus measures by the
government and continued strength in Japanese exports should provide a
reasonably favourable backdrop for corporate earnings.
In the meantime, many Japanese companies have achieved a significant
improvement in profit margins primarily due to far reaching cost cutting
efforts. We believe that these companies will continue to display a clear
recovery trend into the 2010 Japanese fiscal year as they remain disciplined
about cost reductions amid a more benign macro economic environment. There is
potential for these profits to lead to a continuation of the trend of improved
dividend yields.
William Thomson
Chairman
15 March 2010
Manager's Review
PERFORMANCE REVIEW
The undiluted net asset value of the Company rose by 3.7% compared with a 6.3%
decline in the Russell Nomura Mid/Small Cap Index (all figures in sterling
terms).
Alongside most major stockmarkets, the Japanese equity market reached its low
point in March 2009 during the financial crisis. Subsequent to that, an
unprecedented worldwide fiscal and monetary policy response to the global
financial crisis successfully stabilised economies. Credit spreads narrowed,
risk aversion receded and equity markets responded with a powerful rally.
Although most major equity markets reached new year to date highs in the fourth
quarter, the performance of Japanese stocks was poor in comparison. Additional
monetary easing by the Bank of Japan and a reversal in yen appreciation
precipitated a rebound towards the end of the review period, however it was
insufficient to offset previous declines. Despite growing confidence in the
global economic recovery, Japan-specific factors such as a stronger yen,
political uncertainty and widespread equity financing impeded the market.
A rapid increase in the number of equity financing deals had a negative impact
on the market. The
extent of new share offerings increased dramatically in 2009, totalling an
estimated ¥5 trillion for the year. This constituted a relatively high
proportion of total market capitalisation and the majority of deals were
concentrated in the second half of the year when market conditions were mixed.
During the review period, the Democratic Party of Japan and its allies formed a
majority in the Diet's Lower House. This marked the first meaningful political
realignment since the end of the Second World War and introduced an element of
political uncertainty which financial markets rarely welcome. The year was also
characterised by a stronger yen which, against the backdrop of a moribund
domestic economy, hampered the ability of the export sector to compete.
Although the stockmarket failed to make significant headway over the review
period, sector rotation in the equity market was quite dramatic and a mirror
image of 2008. Thus domestic and defensives sectors, such as utilities and
information and communication underperformed the market, whereas economically
sensitive sectors such as automobiles and technology performed very well.
PORTFOLIO REVIEW
Your Company significantly outperformed the Russell Nomura Mid/Small Cap Index
(in sterling terms).
A portfolio strategy with significant exposure to undervalued cyclical
manufacturers and to fast-growing internet related services proved rewarding.
Among cyclical stocks, the Company's emphasis on niche automotive parts
manufacturers was well rewarded. A cyclical upswing in the automobile value
chain, driven by inventory restocking, strong end demand in emerging markets
and signs of progress in cost cutting created an ideal environment for auto
parts manufacturers. Moreover, a reversal in yen appreciation towards the end
of the year fuelled gains in their share prices. The Company's holdings in the
TFT-LCD value chain - major detractors from relative returns in 2008 - also
enjoyed a strong return reversal and added significant value. Furthermore,
holdings in the internet based consumer service providers appreciated on
expectations of strong secular top line growth despite weak consumer spending.
At the individual stock level, an online advertising company, Cyber Agent, was
the single largest contributor to the Company's relative returns over the year
under review. Although online advertising growth remained sluggish, Cyber
Agent's e-commerce and fee based services, such as its blog and SNS (social
networking services), continued to expand and impressive second quarter results
reflected the strength of these operations. Automotive parts makers including
Takata (seat belts), TS Tech (seats), Toyota Boshoku (interior fabric and
components) also ranked among the leading contributors to performance. These
niche manufacturers appreciated as the yen weakened towards the end of the year
and as expectations grew for a recovery in global demand. Other major
contributors included producers of LCD parts and materials. A cyclical upturn
in demand for flat panel displays and signs of progress in cutting costs
accelerated gains in their share prices. A glass maker, Nippon Electric Glass,
benefited from a recovery in sales of LCD glass substrates, and Daicel Chemical
from a pickup in shipments of triacetyl cellulose films.
Conversely, a holding in consumer finance company Promise detracted from
relative returns due to concerns about additional claims for reimbursements of
excessive interest charges. The share price performance of Zappallas was also
disappointing, but the overweight position was maintained, as new sales
opportunities through NTT Docomo (Japan's largest mobile communication
provider) were expected to help sustain its mid-term growth. Generic drug
producer Nichi-iko Pharmaceutical's share price suffered a setback following
the disclosure of talks of a potential cutback in the government's subsidies
for the promotion of generic drug usage. However, an overweight position was
maintained, as it should benefit from the long term expansion of the generic
drug market in Japan as the population ages and costs become a key focal point.
The portfolio strategy remains focussed on highly competitive mid/small caps
stocks in the fast growing internet based services area. The largest single
stock position was held in M3, a provider of a medical portal site. An
expansion of the membership base continues to drive the firm's strong sales
growth. Exposure was increased to the fast growing SNS providers and leading
developers of online games and content for mobile phones which are seeing
strong gains in membership numbers and page views. Prime examples are DeNA and
Gree. Holdings were also increased in Cyber Agent as there is clear evidence
that it has started to successfully monetise its blog service. At the same
time, a relatively large exposure was maintained to cyclical stocks in the
automobile and technology sectors, which should benefit from a recovery in
global demand. Within the technology sector, overweight positions were
maintained in electronic components and equipment for hard disk drives and
semiconductors such as Tokyo Electron, Horiba and Nichicon. A rapid recovery in
final demand for PCs and handsets is expected to drive their earnings recovery.
Exposure was reduced in pharmaceutical and food producers including Tsumura and
Toyo Suisan Kaisha, which are of a defensive nature, while the portfolio
remains geared towards a recovery in global economic activity.
The number of holdings in the fund increased from 100 a year ago to 114. This
mirrors the availability of attractive investment opportunities in the market.
However, the portfolio remained fairly concentrated.
OUTLOOK
Since the onset of the global financial crisis, a stabilisation in economic
activity has been occasioned by an unprecedented and globally co-ordinated
fiscal and monetary policy response. This has led to a sharp recovery in some
jurisdictions, with the emerging market economies proving to be a particularly
important component of global growth. This has undoubtedly put pressure on
sovereign debt levels in many western countries and it has yet to be seen
whether this will be sufficient to stimulate sustained credit growth.
Whilst Japan's geographical position has allowed it to benefit from Asia's
economic rebound, the domestic economy currently remains unable to shake off
what has been a deflationary environment for over a decade. Moreover, the
extent of Japan's negative output gap indicates that price declines will
continue well into 2011 and private domestic demand is unlikely to embark on a
self sustaining recovery in the near future.
However, there are some substantial positives from the corporate sector in
Japan and these are likely to be best captured amongst mid and small sized
companies. First, the inventory rebuild following the global financial crisis
is likely to drive the potential for positive earnings revisions ahead of the
full year results season in the spring. In the 2010 Japanese fiscal year,
assuming an uptrend in global economic activity and a more stable exchange
rate, a sharp rebound in corporate profits should emerge. Second, in certain
cases aggressive cost cutting has left companies operationally geared into
improving top line growth. Where this powerful combination exists there could
emerge some large earnings surprises in 2010. We believe that divergence in
earnings growth, which is often ignored during the early stages of recovery,
will become increasingly important as the early stage of recovery ends. This is
where many future opportunities should emerge and where stock picking will be
particularly important.
It is also the case that many smaller companies, which due to their limited
liquidity were particularly badly affected during the recent fall in the
Japanese market, offer good upside potential as earnings recover. Currently,
the proportion of mid and small cap stocks which trade below book value remains
high and they also compare favourably with large cap stocks. We remain focussed
on mid and small cap stocks geared into an improving top line growth, which
bodes well for both margins and earnings growth.
FIL Investments International
15 March 2010
Principal risks, uncertainties and risk management
The Board confirms that there is an ongoing process for identifying, evaluating
and managing the principal risks faced by the Company. The Board, with the
assistance of the Manager, has developed a risk matrix which, as part of the
internal controls process, identifies the key risks that the Company faces. The
matrix has identified strategic, marketing, investment management, statutory
and administrative and operational and support function risks. The Board
reviews and agrees policies for managing these risks. The process is regularly
reviewed by the Board in accordance with the FRC's "Internal Control: Revised
Guidance for Directors on the Combined Code". Risks are identified, introduced
and graded. This process, together with the policies and procedures for the
mitigation of risks, is updated and reviewed regularly in the form of
comprehensive internal controls reports considered by the Audit Committee. The
key risks identified within this matrix are:
Market
The Company's assets consist mainly of listed securities and the principal
risks are therefore market related such as market recessions, interest rate
movements, deflation/inflation, terrorism and protectionism.
Risks to which the Company is exposed and which form part of the market risks
category are included in Note 17 to the financial statements in the annual
report together with summaries of the policies for managing these risks. These
comprise: market price risk; foreign currency risk; interest rate risk,
liquidity risk; counterparty risk and credit risk.
The Company had fixed term, fixed rate loan facilities in place which were
repaid during 2009. The extent to which any loan facilities will be renewed
will be kept under the most careful scrutiny. In November 2009 shareholder
authority was obtained to amend the Company's investment policy to permit
gearing by way of CFDs. In addition a day to day overdraft facility can be used
if required. The impact of limited finance from counterparties including
suppliers has not affected the Company to date, however there are alternative
suppliers available in the market place should the need arise.
The Company relies on a number of main counterparties, namely the Manager,
Registrar, Custodian and Auditor. The Manager is the member of a privately
owned group of companies on which a regular report is provided to the Board.
The Manager, Registrar and Custodian are subject to regular audits by
Fidelity's internal controls team and the counterparties' own internal controls
reports are received by the Board and any concerns investigated.
Investment management
The Board relies on the Manager's skills and judgement to make investment
decisions based on research and analysis of individual stocks and sectors.
The Board reviews the performance of the asset value of the portfolio against
the Company's benchmark and competitors and the outlook for the market with the
Manager at each Board meeting. The emphasis is on long term investment
performance and the Board accepts that by targeting long term results the
Company risks volatility in the shorter term.
Share price
The Board is not able to control the price at which the Company's ordinary and
subscription shares trade; it may not reflect the value of the underlying
investments. However, it can have a modest influence in the market by
maintaining the profile of the Company through an active marketing campaign
and, under certain circumstances, through repurchasing shares.
Currency
The Company's total return and balance sheet are affected by foreign exchange
movements because the Company has assets and income which are denominated in
yen whilst the Company's base currency is sterling. While it is the Company's
policy not to hedge currency, the fact that borrowings by way of CFDs are in
yen means that part of the investment portfolio funded by borrowing is
naturally hedged against changes in the yen:sterling exchange rate. Further
detail can be found in Note 17 to the financial statements in the annual
report.
Governance/regulatory, financial, operational administration
While it is believed that the likelihood of poor governance, compliance and
operational administration by other third party service providers is low, the
financial consequences could be serious, including the associated reputational
damage to the Company. Your Board is responsible for the Company's system of
internal controls and for reviewing its effectiveness. Details of this process
are provided in the Corporate Governance Statement within this annual report.
Financial instrument risks
The financial instrument risks faced by the Company are shown in Note 17 to the
financial statements in the annual report. The additional risk to the Company
of using CFDs rather than traditional forms of borrowing is that the Company
does not own the Japanese equities to which the CFDs give exposure and is at
risk if the counterparty defaults, for example for insolvency reasons. The
balance on all outstanding CFDs is calculated on a daily basis with collateral
then adjusted so that collateral equal to the outstanding balance has been
recognised, although no collateral adjustment is made where the balance is less
than US$1 million. This results in a potential exposure which could be
increased due to settlement practices and timing differences, to a maximum of
US$1 million plus three days' unrealised trading profits.
Other risks
Other risks monitored on a regular basis include loan covenants in times when
the Company takes out loans, which are subject to daily monitoring, together
with the Company's cash position, and the continuation vote (at a time of poor
performance).
Related Parties
Simon Fraser was employed by Fidelity International until the end of December
2008. FIL Investments International is a member of the Fidelity International
group of companies. As at the date of this report FIL Limited has an interest
in 6,854,100 ordinary shares in the Company (7.17%) and 1,370,820 subscription
shares (7.17%)
No Director is under a contract of service with the Company and no contracts
existed during or at the end of the financial period in which any Director was
materially interested and which was significant in relation to the Company's
business, except as disclosed in relation to Simon Fraser's interest in the
Management Agreement. There have been no other related party transactions
requiring disclosure under Financial Reporting Standard ("FRS") 8.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the annual report and financial
statements in accordance with applicable law and regulations. Company law
requires the Directors to prepare financial statements for each financial
period. Under the law they have elected to prepare the financial statements in
accordance with UK Generally Accepted Accounting Practice.
The financial statements are required by law to give a true and fair view of
the state of affairs of the Company and of the profit or loss for the period.
In preparing these financial statements the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject
to any material departures disclosed and explained in the financial statements;
and
• prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for ensuring that adequate accounting records are
kept which disclose with reasonable accuracy at any time the financial position
of the Company and to enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Under applicable law and regulations the Directors are also responsible for
preparing a Directors' Report, including a Business Review, a Directors'
Remuneration Report and a Corporate Governance Statement that comply with that
law and those regulations.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's pages of the
Manager's website www.fidelity.co.uk/its. Visitors to the website need to be
aware that legislation in the United Kingdom governing the preparation and
dissemination of the financial statements may differ from legislation in their
own jurisdictions.
We confirm that to the best of our knowledge the financial statements, prepared
in accordance with the applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and profit or loss of
the Company; and the Directors' Report includes a fair review of the
development and performance of the business and the position of the Company
together with a description of the principal risks and uncertainties it faces.
Approved by the Board on 15 March 2010 and signed on its behalf.
William Thomson
Chairman
15 March 2010
Enquiries:
Chris Davies, FIL Investments International - 01737 837 723
Rebecca Burtonwood, FIL Investments International, Company Secretary - 01737
836 869
FIDELITY JAPANESE VALUES PLC
Income Statement
- for the year ended 31 December 2009
2009 2008
revenue capital total revenue capital total
£'000 £'000 £'000 £'000 £'000 £'000
Losses on investments designed - (668) (668) - (5,946) (5,946)
at fair value through profit or
loss
Net gains on derivative - 1,694 1,694 - - -
instruments held at fair value
through profit or loss
Income
- Overseas dividends 920 - 920 1,284 - 1,284
- Deposit interest - - - 4 - 4
- Dividends on long Contracts 6 - 6 - - -
For Difference
Investment management fee (682) - (682) (719) - (719)
Other expenses (639) - (639) (338) - (338)
Exchange gains/(losses) on 2 (1,419) (1,417) 15 2,871 2,886
other net assets
Exchange gains/(losses) on - 2,980 2,980 - (9,612) (9,612)
loans
Net (loss)/return before (393) 2,587 2,194 246 (12,687) (12,441)
finance costs and taxation
Interest payable on loans and (239) - (239) (269) - (269)
CFDs
Net (loss)/return on ordinary (632) 2,587 1,955 (23) (12,687) (12,710)
activities before taxation
Taxation on loss on ordinary (64) - (64) (89) - (89)
activities *
Net (loss)/return on ordinary (696) 2,587 1,891 (112) (12,687) (12,799)
activities after taxation for
the year
(Loss)/return per ordinary (0.73p) 2.71p 1.98p (0.12p) (13.23p) (13.35p)
share (1)
A Statement of Total Recognised Gains and Losses has not been prepared as there
are no gains and losses other than those reported in this Income Statement.
The total column of the Income Statement is the profit and loss account of the
Company. All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued in the year.
* This relates to overseas taxation only
FIDELITY JAPANESE VALUES PLC
Reconciliation of Movements in Shareholders' Funds
- for the year ended 31 December 2009
called Share capital other capital revenue total
up share premium redemption reserve reserve reserve equity
capital account reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Opening 24,256 44 2,075 59,591 (8,933) (12,341) 64,692
shareholders'
funds: 1
January 2008
Net recognised - - - - (12,687) - (12,687)
capital losses
for the year
Repurchase of (362) - 362 (680) - - (680)
ordinary shares
Net revenue loss - - - - - (112) (112)
after taxation
for the year
Closing 23,894 44 2,437 58,911 (21,620) (12,453) 51,213
shareholders'
funds:
31 December 2008
Net recognised - - - - 2,587 - 2,587
capital gains
for the year
Bonus issue of 956 - - (956) - - -
subscription
shares
Net revenue loss - - - - - (696) (696)
after taxation
for the year
Closing 24,850 44 2,437 57,955 (19,033) (13,149) 53,104
shareholders'
funds:
31 December 2009
FIDELITY JAPANESE VALUES PLC
Balance Sheet
- as at 31 December 2009
2009 2008
£'000 £'000
Fixed assets
Investments designed at fair value through profit or 49,743 65,324
loss
Current assets
Derivative assets held at fair value through profit 1,692 -
or loss
Debtors 926 1,124
Cash at bank 2,403 2,301
Cash collateral with lender - 7,045
5,021 10,470
Creditors - amounts falling due within one year
Derivative liabilities held at fair value through (101) -
profit or loss
Fixed rate unsecured loans - (23,952)
Other creditors (1,559) (629)
(1,660) (24,581)
Net current assets/(liabilities) 3,361 (14,111)
Total net assets 53,104 51,213
Capital and reserves
Called up share capital 24,850 23,894
Share premium account 44 44
Capital redemption reserve 2,437 2,437
Other reserve 57,955 58,911
Capital reserve (19,033) (21,620)
Revenue reserve (13,149) (12,453)
Total equity shareholders' funds 53,104 51,213
Net asset value per ordinary share
Basic 55.56p 53.58p
Diluted 55.47p
n/a
FIDELITY JAPANESE VALUES PLC
Cash Flow Statement
- for the year ended 31 December 2009
2009 2008
£ £'000
'000
Operating activities
Investment income received 906 1,175
Deposit interest received - 4
Investment management fee paid (696) (690)
Directors' fees paid (94) (81)
Other cash payments (489) (263)
Net cash (outflow)/inflow from operating activities (373) 145
Returns on investments and servicing of finance
Interest paid on fixed rate unsecured loans (273) (252)
Net cash outflow from returns on investments and (273) (252)
servicing of finance
Financial investment
Purchase of investments (90,680) (97,886)
Disposal of investments 106,195 106,226
Net cash inflow from financial investment 15,515 8,340
Derivative activities
Proceeds of derivatives instruments 103
-
Net cash inflow from derivative activities 103
-
Net cash inflow before financing 14,972 8,233
Financing
Repurchase of ordinary shares - (680)
1.565% fixed rate unsecured loan repaid (9,475) -
1.34% fixed rate unsecured loan repaid (11,497) -
Cash collateral held with lender 7,045 (7,045)
Net cash outflow from financing (13,927) (7,725)
Increase in cash 1,045 508
1. Basic (losses)/returns per ordinary share are based on the net revenue
loss on ordinary activities after taxation in the year of £696,000 (2008: £
112,000), the capital return in the year of £2,587,000 (2008: capital loss of £
12,687,000) and the total return in the year of £1,891,000 (2008: total loss of
£12,799,000) and on 95,577,453 ordinary shares (2008: 95,878,956) being the
weighted average number of ordinary shares in issue during the year.
The above statements have been prepared on the basis of the accounting policies
as set out in the financial statements in the annual report to 31 December
2009. This preliminary statement, which has been agreed with the Auditor, was
approved by the Board on 15 March 2010. It is not the Company's statutory
financial statements. The statutory financial statements for the financial
year ended 31 December 2008have been delivered to the Registrar of Companies.
The statutory financial statements for the financial year ended 31 December
2009have been approved and audited but have not yet been filed. The statutory
financial statements for the financial years ended 31 December 2008 and 31
December 2009 received unqualified audit reports, did not include a reference
to any matters to which the Auditor drew attention by way of emphasis without
qualifying the report and did not contain statements under section 498(2) and
(3) of the Companies Act 2006.
The annual report and financial statements will be posted to shareholders as
soon as is practicable and in any event no later than 12 April 2010.
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